Spitzer's proposed budget would raise gas taxes
JAMES P. HAYES New York State Assembly
A2008-09 state budget, Gov. Eliot Spitzer is proposing to merge several existing state fuel taxes - including the 4 percent state sales tax - into a newly configured "Petroleum Business Tax."

At first look, the proposal appears to be an effort to streamline the collection and reporting of fuel taxes.

A closer look, however, exposes the plan as a tax grab that will eliminate the current $2 sales tax cap on gasoline and will cost unsuspecting motorists even more in state taxes at the pump.

Currently, an 8.75 percent sales tax is added to the price of gasoline in Erie County. Next, 4.75 percent of that sales tax goes to Erie County - and 4 percent goes to New York State.

This sales tax is calculated on top of all other state and federal excise taxes and added to the per gallon price of gas at the pump. The combination of taxes is the main reason why Western New Yorkers pay some of the highest gas prices in the nation.

Back in 2005 and again in 2006, I joined with my Assembly Republican colleagues to fight for the elimination of the state's 4 percent share of the sales tax on gasoline.

Because the sales tax is collected as a percentage of the per gallon cost of gasoline, New York State started to enjoy a tax windfall as gas prices went up. To me, that was simply unfair to families commuting back and forth to work and school. Many residents signed petitions to aid in the fight.

Unfortunately, the sales tax on gasoline was not eliminated, but in a forced compromise, the powers in Albany agreed to "cap" the sales tax on gasoline at $2 per gallon. Although we didn't win the war, we won an important battle, and it was a step in the right direction. Spitzer's budget would take us back in the wrong direction.

What little relief motorists felt from that initial effort will now be reversed if Gov. Spitzer gets his way in this year's budget negotiations.

What's worse is the fact that this newly configured tax will be "indexed" to the price of petroleum, which obviously means higher taxes today and higher taxes in the future.

I recently challenged the commissioner of Tax & Finance on this very point during recent budget hearings in Albany, and I'm sorry to report that the commissioner admitted the proposal would raise gas taxes - this year and next year.

Gov. Spitzer's budget projects $13.2 million in increased tax revenue to the state from the proposal this year and a whopping $55.9 million next year.

That's wrong. The state should be finding ways to cut costs - not raise taxes.

I'll be fighting this proposal during budget deliberations in Albany this month. It breaks an important promise the governor made to the people of this state; it's bad for the economy; and most of all, it will hurt families in Western New York who are already struggling financially and feeling the pressure of higher prices at the gas pump and in the grocery store.

I welcome your views and hope you will feel free to contact me by calling my office in Williamsville at 634-1895 or via e-mail at hayesj@ assembly. state. ny. us.